Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Rekenthaler: Are DFA's Charts a Little Too Convenient? Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, August 26, 2013

Rekenthaler: Are DFA's Charts a Little Too Convenient?

News summary by MFWire's editors

Morningstar's John Rekenthaler covered the insufficiencies and limitations of charts when talking about factors in mutual fund performance, going in to more depth on a recent DFA [profile] survey. In a recent column, Rekenthaler tackled the DFA results, providing charts that showed funds with higher Morningstar ratings tended to survive longer than those with low ratings.

Rekenthaler points out that charts without context, measures of statistical significance or average results or use of more reliable factors, will, of course, conveniently lessen the importance of a certain factor and make the chart look so chaotic that no rhyme or reason can be discerned from it. Having the scatterplot on one axis and returns on the other also ignores survivorship and gets rid of dead funds data which may be the most useful to understanding what factors are important, Rekenthaler says.

The charts Rekenthaler shows, which consist of clusters of blue dots following no particular pattern, were released from DFA's advisor communications group not its research group. Rekenthaler writes, "…they were used to wean their clients from the habit of expecting funds with high star ratings and/or Sharpe ratios." Having the scatterplot on one axis and returns on the other also ignores survivorship.

To read more, click here.  

Edited by: Casey Quinlan


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use